Rainbow Management Group, Ltd. v. Atlantis Submarines Hawaii, L.P.

Brief Fact Summary.

Atlantis Submarines Hawaii, L.P. filed a cross-claim against Rainbow Management Group, Ltd. after a passenger of the Boston Whaler, Goerge Barry, sued both parties for injuries sustained in a crash with the Elua.

Synopsis of Rule of Law.

Under FRCP 13(a), co-parties become opposing parties when one asserts a counterclaim against the other.

Facts.

Rainbow Management Group, Ltd. (RMG) owned a boat called the Elua, that crashed into the Boston Whaler owned by Haydu. A passenger of the Boston Whaler, George Barry, initially filed suit against both RMG and Atlantis Submarines Hawaii, L.P. (ASH). ASH filed a cross-claim against RMG seeking contribution and breach of contract. Following the original lawsuit, RMG filed suit against ASH and Haydu for damage to the Elua. ASH moved for summary judgment claiming that RMG was required to file its claim as a compulsory counterclaim.

Issue.

Whether co-parties become opposing parties when one asserts a counterclaim against the other?

Held.

Yes. ASH’s motion for summary judgment is granted. When ASH sued RMG for contribution and breach of contract, the parties became opposing parties and RMG should have made their additional claims.

Discussion.

FRCP 13(g) allows co-parties to assert cross-claims against other co-parties, as long as the issue arises out of the same transaction or occurrence as the original claim. When one co-party asserts a cross claim against another party, the parties become opposing parties under FRCP 13(a).